Japan urged to be creative to stay competitive

In contrast to fast-growing Asian economies like China and India, Japan’s slow pace of economic reform coupled with its graying population and shrinking workforce is a concern to Western investors.

To stay competitive, Japan must come up with a new strategy for growth by focusing on creative industries, including fashion and design, said John C. Beck, dean of the business school at Globis University in Tokyo and a prominent Japanese business watcher.

Beck was recently appointed dean at Globis, a graduate school that offers master’s of business administration programs to midcareer professionals.

Japan’s strong manufacturing sector, which succeeded by paying attention to detail, helped the country become the world’s second-biggest economy. But South Korea and Taiwan have caught up with Japan by putting out products of similar quality.

However, Beck noted during an interview last week that Japan still stands out in terms of design.

For example, cars made by Toyota Motor Corp. are better designed than foreign-made autos, he said.

“I don’t think most people recognize that’s what Japan’s strength is. I think Japan has a potential to become a creative engine for the world,” he said.

Japanese “anime” (animation), “manga” (comics) and games have captured the hearts of children all over the world, noted Beck, who has taught at business schools at Harvard University, UCLA, Switzerland’s IMD and the Thunderbird School of Global Management, among others.

In a class at the University of Southern California in 2006, he asked students — about half of whom were Americans and the other half Chinese — what media were most important to them in their childhood.

“Half of Americans said something about Japanese and 100 percent of Chinese said something about Japanese. They were growing up thinking that Japan is just cool,” Beck said. “Now, take it and keep moving into adulthood with them, and continue to give them amazing fashion and others.

“Most Western countries are very open to Japan being a kind of design leader. Now Japan has to get some confidence and take the lead on it,” he said, adding that the Japanese tend to come out on the losing end when communicating with Westerners due to cultural differences.

“I think a lot of (Japanese) people say things like ‘Oh no, we just make minor, little changes. We are not really creative.’ But out of a bunch of minor and little changes comes a product,” he said.

A tip on communicating business decisions with the West is, he said, “Make sure that you’re not too modest.”

He said insufficient English-language skills are “one of the biggest impediments to the Japanese economy being more global.”

Globis University, which currently offers MBA classes in Japanese, will start offering an English-language MBA program in April to attract both Japanese students and non-Japanese living here and from abroad. Beck will lead the program to nurture global mind-sets — an ability to think, make decisions and communicate with the West in English — as well as basic managerial skills.

“My most important goal is to create a world-class business school” that attracts foreign students, he said. The diversity of students could help train Japanese and others to manage global operations, he added.

Japanese companies have often brought in foreign executives, including Nissan Motor Co.’s Carlos Ghosn, Sony Corp.’s Howard Stringer and Nippon Sheet Glass Co.’s Stuart Chambers, to carry out radical shakeups and connect Japanese companies to the rest of the world.

As more Japanese companies make large acquisitions abroad, including Tokio Marine Holdings Inc.’s acquisition of nonlife insurance group Philadelphia Consolidated Holding Corp., more top executives are expected to come out of Japan, Beck said.

“What I want to see, at some point, is more Western companies hiring Japanese to be the head of their group,” he said. “That would be a great goal. Maybe in my lifetime.”